Later this year will see the release of a cheaper, more compact Xbox One, while next year Microsoft are rumoured to release a more powerful version of the console, more in line with the PlayStation 4.5 (codenamed “Neo”).

According to Kotaku, this year’s model will include a 2TB hardrive, while The Verge reports that it’ll be 40% smaller than the current Xbox One and will likely include 4k support.

This would make it both the smallest Xbox ever made in terms of physical size, and largest in terms of memory.

The two consoles would form part of a wider Microsoft strategy, codenamed “Project Helix”. The aim of this strategy would be to converge Xbox and Windows, Microsoft’s two biggest brands.

Developer sources have told Kotaku that Microsoft’s new mandate is to release future games across both platforms.

Interestingly, Kotaku have also heard that instead of one hardware revision every five years or so (as is often the norm) Microsoft plans to move towards more frequent hardware releases and games that are both forwards and backwards compatible across both Windows 10 and different Xbox models.

In a recent livestream, Brad Sams discussed the new consoles, and suggested the Microsoft will also be announcing new streaming hardware, similar to Google’s Chromecast or Amazon’s Fire Stick.

He said:

They’re going to have two devices, it’s going to be one [for] super streamers, think a Roku style device, and then another device that’s going to have more features. What I think the differentiation between these two devices are, I’d imagine the smaller devices will be for streaming only … but the other device I honestly think is where they’re going to start using app leverage. I could see this device sitting in the cabinet and being able to play Windows Store games.

Sams clarified that he doesn’t believe these streaming devices would be capable of running high-end games, but would work better with apps and lightweight games, like the Apple TV.